IFSCA to regulate funds industry, engage with stakeholders to amplify GIFT city investments

Established in April 2020, the IFSCA will look to streamline the current Investment Funds ecosystem and remove roadblocks to its growth

May 25, 2021

It will be headed by Nilesh Shah (MD, Kotak Mahindra Asset Management) and assisted by a Committee.

The body will serve as a single-window clearance facility for all decisions, replacing the current setup involving multiple regulatory entities.

The GIFT project in Gandhinagar will help increase local employment opportunities in IT and financial services.

The project was conceptualized with the vision of transforming the locality into a Central Business District (CBD).

International Financial Services Centres Authority (IFSCA) which was established in April 2020 will serve as the regulator of the funds industry including institutions, financial products, and services through International Financial Service Centres. The body will look to replace the multiple regulatory bodies including the Securities and Exchange Board of India (SEBI) and Pension Fund Regulatory and Development Authority (PFRDA)  that currently oversee each of the above facilities. Under the leadership of Nilesh Shah, MD, Kotak Mahindra Asset Management Co. Ltd and a committee comprising industry leaders from diverse inter-related disciplines including legal, operations, compliance, and distribution, the Committee will discharge the following responsibilities: 

(i) Making two-fold recommendations in relation to the structure of investment funds as follows : a) short term provisions that can be implemented in less than 3 months, b) mid-term provisions that will be implemented between 6 months to 1 year, subject to the regulatory powers of other entities. 

(ii) Identifying potential regulatory and non-regulatory roadblocks to the growth of the funds industry. 

(iii) Formulating a long-term operations plan for the funds industry. 

(iv) Streamlining the Investment Funds ecosystem through engagement with a gamut of stakeholders across venture capitalist, hedge funds, private equity, asset management and other entities. 

The constitution of the Committee can be accessed here: https://ifsca.gov.in/IFSCACommittees . The presence of the IFSCA will help elicit international investments through the hybrid model that prioritizes domestic as well as international investors. In line with this objective of the IFSCA, the Gujarat International Finance Tec-City (GIFT) has been instituted in Gandhinagar. The city is expected to function as an IT- Fintech hub and a Special Economic Zone equipped with infrastructure, connectivity and facilities of international quality. Additionally, the 886-acre asset will serve as the venue for the development of a Central Business District (CBD) and look to increase local employment in the financial services and IT sectors. The IFSCA will help amplify the reach of GIFT through strategic stakeholder engagement, enhancing the ease of doing business, and taking on regulatory provisions. 

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